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The year of mobile: fact or fiction?

Will 2010 be the year of mobile? It’s the perennial question and it’s certainly getting closer. Improving handset technology and increased demand for the mobile internet are propelling the industry forward. Econsultancy’s new Mobile Marketing Buyer’s Guide explores the various developments that are removing the barriers to growth.

In the past, the mobile sector has been plagued by hype and over-ambitious forecasts that rarely meet reality but there is now reason to believe that we are close to a tipping point.

Despite mobile still making up a relatively small proportion of overall marketing spend, its growth displays a similar trend to the early days of online. So it’s safe to say that even though mobile may have not have met the highly anticipated forecasts of previous years, the channel is growing exponentially.

According to IAB figures, expenditure on mobile advertising alone, for example, reached a value £28.6 million in 2008, accounting for a hefty growth rate of 99.2% since 2007.

So, the question is, why now? Changing user behaviour and a cultural shift in the role of the mobile phone in response to ever-sophisticated technology are paramount in moving the industry forward.

The mobile phone is no longer merely a device for making phone calls; it’s a camera, a TV in your pocket, an online video portal, a music player, a web browser, and so much more.

The ubiquitous nature of the iPhone has an important part to play in thrusting mobile forward. Not only does the iPhone provide a similar browsing experience to accessing the internet through a computer, but the App Store has also allowed many big-name brands to experiment with the space.

Although few companies (in the UK, at least) have set up their own dedicated m-commerce site, many more have created their own iPhone application. It is important to note, however, that despite its popularity, the iPhone (and indeed, smartphones more generally) still make up a relatively small proportion of the overall handset market.

This is partly reflected in a Bango study, which looked at the top 20 most popular handsets for buying products and services via the mobile internet. While the Nokia 3110c was the most popular handset, the iPhone came in at a rather paltry number 24.

“The hype around Apple’s iPhone, that has no connection with the actual mass consumer market (yet), is occasionally distorting conversations to the point where it’s all about ‘we want an app’. This means more than 95% of most target markets are being ignored, even if the application is actually used.”

For many companies, a major barrier stems from setting up mobile campaigns that are optimised for the wealth of different handsets, resolutions, and application providers. This explains why SMS has long been the mobile messaging type of choice for many global campaigns, as it is the only technology that is compatible across multiple handsets and works in all languages.

However, the entry of Google into the smartphone market and the subsequent launch of the Open Handset Alliance (OHA), which aims to create a set of open standards for mobile, is a promising development for the industry.

For forward-thinking companies, now is the time to start formulating a strategy for mobile.

The key advantage of mobile over other marketing channels is the ability to reach individual consumers, with highly targeted messaging. BMW’s MMS campaign in Germany, which encouraged consumers to purchase winter tyres with personalised images of their car, provides a good example of an effective use of the mobile channel.

The overwhelming success of the campaign is reflected in the 30% conversion rate, and staggering $45 million dollars of additional business that BMW generated.

Other companies doing good work in the mobile space include Lastminute.com, who are making effective use of location-based services and geotargeting with their mobile restaurant booking service, Fonefood.

Lastminute also recently released a new free app for the iPhone, called nru, which uses the iPhone 3GS’s compass and GPS to overlay the user’s location with information about local bars and restaurants.

Other recent technology developments such as augmented reality, image recognition systems and 2D / QR codes are providing exciting new possibilities in the mobile marketing arena. The futuristic and mind-blowing opportunities afforded by the augmented reality (AR) in particular, could provide the “killer app” to propel mobile into the mainstream.

However as with other digital channels, it’s not about the technology per se; companies need to have a clear understanding of how these technologies fit into a wider brand strategy, and add value for their customers.

So while the year of mobile may not be on the horizon for at least a couple of years, the sector is driving forward as growth accelerates more rapidly than ever before.

The savviest organisations are already experimenting with the mobile channel, and the time for brands to act is now.

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